'Court-annexed' arbitration is technically not arbitration at all, at least under the traditional model. Rather, it is a method of resolving disputes which are already in court, but without the traditional judge or jury.

When their is no agreement to use private arbitration, people with a civil dispute have to go to court. In the traditional dispute resolution model using the courts, when a lawsuit is filed in court, after several earlier stages (pleadings, motions, discovery), the case is is presented for trial to a judge, or to a judge and jury. Depending on the volume of cases filed in a court (especially the number of criminal cases, which often have priority) and the number of judges available, even getting a 'small' civil case to trial can involve high cost and long delays. Many cases do not settle until a trial is near, and preparation for trial is often, if not always, more expensive than trial itself.

To speed up and lower the expense to resolve smaller cases, the most court systems in the United States have developed 'court-annexed' arbitration programs. The Oregon legislature has passed laws providing for court annexed arbitration.

What this means in Oregon is that certain categories of cases (cases seeking only damages of less than $50,000, and divorce cases not involving children or support) are diverted into a somewhat non-traditional dispute resolution process. The cases are heard by experienced lawyers without a jury, under the general supervision of the courts. The process uses a somewhat simplified method of presentation, but in a procedure that is similar to a trial to a judge sitting without a jury. The reality is that simpler presentation does not affect the result in most cases. Trial of cases in court annexed arbitration is much cheaper, which means that cost of trials is less of a barrier to justice for those litigants that want a trial and don't care who is the trier of fact as long as he or she is neutral. Court annexed trials are tried on a much speedier basis than waiting for a judge or jury to be available.

After the hearing, usually conducted in the lawyer / arbitrator's conference room, the lawyer / arbitrator often writes an opinion, followed by an award which is filed with the court. For examples of opinions from typical types of cases in court annexed arbitration, click here. If a litigant is dissatisfied with the award, the litigant may 'appeal' back into the traditional court system to obtain a trial before an elected judge, with a jury if that would otherwise be permitted. Most court-annexed arbitration awards are not appealed.

The lawyer / arbitrator is paid by the parties according to a fee structure set by the local arbitration commissions in each county's Circuit Court. For most lawyer / arbitrators, these fees are much less than they could earn doing other work. Even though the litigants must pay that fee, the expedited resolution and simplified method of presentation of cases results in huge savings. The cost of the lawyer / arbitrator is usually awarded as an expense to be paid by the loser.

The arbitrator in a court annexed arbitration may be selected by the parties. If the parties cannot agree, the arbitrator will be selected by the court.